Abe’s new economic stimulus package will end up only increasing gov’t debts

August 3, 2016

The Abe Cabinet on August 2 approved a new economic stimulus measures amounting to 28 trillion yen, the largest policy package in terms of the total cost after PM Abe took office in 2012. This package, however, will only inflate government debts and increase the wasteful use of taxpayers’ money on large-scale public work projects.

This economic stimulus plan depends heavily on revenue from government bonds. The breakdown of the 28.1-trillion-yen package is as follows: 7.5 trillion yen of the direct spending by the central and local governments; 6 trillion yen from the fiscal investment program which is funded by a dedicated government bond; and 14.6 trillion yen of loan offerings from government-backed banks and other sources.

A large part of the measures are non-essential large-scale public works projects. The Abe Cabinet proposed to allocate 10.7 trillion yen for infrastructure projects. In particular, it aims to use the fiscal investment and loan program to help the maglev super express construction project be completed as early as possible. However, the moving up of the construction schedule will not create new jobs but will only pose financial burdens on the general public.

Other infrastructure projects listed in the stimulus package include development of new expressway networks. Citing the need to promote the tourist industry, the Abe Cabinet also proposed to construct ports capable of accommodating large cruise ships as well as enhance the functions of Tokyo International Airport at Haneda.

Apart from public works projects, the economic policy package even involves measures to strengthen the Self-Defense Forces operations under the pretext of ensuring national security. The Abe Cabinet proposed that the SDF needs to further enhance its quick response and deployment systems in the event of emergency and counterattack capability against ballistic missiles.